NEW YORK (Dow Jones)--Crude futures pushed above $55 a barrel Wednesday as a market accustomed to growing U.S. oil stockpiles guarded against a drawdown.
Light, sweet crude for June delivery was recently up $2.64, or 1.42%, at $55.26 a barrel on the New York Mercantile Exchange, hitting prices last touched in November 2008. Brent crude on the ICE Futures Europe exchange rose $1.09 to $55.21 a barrel.
Government data due at 10:30 a.m. EDT will likely show U.S. crude stockpiles increased about 2 million barrels last week, which would be the ninth straight gain and bring inventories to 376.7 million barrels. But a comparable report from the American Petroleum Institute, issued late Tuesday, showed crude inventories fell 1 million barrels.
"If the API report turns out to have been prescient in its figures, in regard to the DOE statistics this morning, we would have to expect to see prices rally," said Peter Beutel, president of energy risk management firm Cameron Hanover, in a note to clients.
In the U.S. government data, the Energy Information Administration is expected to show crude inventories rose by 2.1 million barrels, gasoline stocks rose 100,000 barrels and stocks of distillates, which include diesel and heating oil, rose 1.2 million barrels in the week ended May 1, according to analysts.
Refinery use is seen rising 0.1 percentage point to 82.8% of capacity.
Oil prices slid from last year's highs above $145 a barrel as the economic crisis depressed world demand. In a sign the recession may be approaching a bottom, payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers reported jobs in the U.S. private-sector fell by 491,000 in April, far lower than the 650,000 loss forecast by economists. Government payrolls data are due out Friday.
"The market is looking for green shoots and this is another indicator," said Nauman Barakat, senior vice president at Macquarie Futures USA in New York.
Oil markets have also taken cues from rebounding stock markets. "Correlations between equities and commodities have moved to all-time highs - contrary to the conventional wisdom that commodities will lag equities during an economic recovery," Morgan Stanley analyst Hussein Allidina said in a note. He said inflows into commodity exchange-traded funds - products that enable small investors to bet on futures markets - helps explain why oil prices have crept up even as inventories sit at their highest levels since September 1990 and world demand is in free fall.
The Organization of Petroleum Exporting Countries appears increasingly unlikely to make new cuts to output when it meets May 28. Algerian Energy Minister Chakib Khelil said Wednesday that if oil price continues to rise and "good news on the economy continues" such as the bullish mood on stock exchanges, "I don't see how we are going to reduce" output at the meeting. He spoke in a telephone interview with Dow Jones Newswires.
Meantime, the CEO of top producer the Saudi Arabian Oil Co., or Saudi Aramco, said that supply will outpace demand in the next several years.
Front-month June reformulated gasoline blendstock, or RBOB, rose 3.87 cents, or 2.5% to $1.6109 a gallon. June heating oil rose 2.83 cents, or 2%, to $1.4545 a gallon.
-By Gregory Meyer, Dow Jones Newswires; 201-938-4377; greg.meyer@dowjones.com